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A note about turnout in yesterday’s elections

A note about turnout in yesterday’s elections

I haven’t seen any information yet on how turnout in last night’s elections, particularly in Virginia, which was an “off-off year” election, i.e., no statewide races at all, only state legislative and local races.

The state of Virginia keeps turnout statistics online back to 1976. The bottom line is, clearly something happened in the late 1990s that drove down turnout, which has been reversed in the last two years.
In the 5 “off years” with statewide races between 1977 and 1993, turnout averaged 61.6% of registered voters.
By contrast, turnout in the “off-off years” between 1979 and 1995, turnout averaged 54.6% of registered voters. That’s a 7% decline.
Now, here are the same figures for the 10 state elections thereafter.
In the 5 “off years” with statewide races between 1997 and 2013, turnout averaged 44.8%, a decline of almost 17%.
In the 5 “off-off years” between 1999 and 2015, turnout averaged 31.0%, a decline of over 23%!

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Some Election Results

I am not quite sure how to begin other than say I am angry at why it has to come to this , and still not enough, before people react.

  • Loudoun County, Virginia: One election event ended positively for a woman who had given Trump’s motorcade (and supposedly Trump) a message of defiance, a one finger salute, as it passed her while she was riding her bike. Former government contractor Julie Briskman won a seat on the Loudoun County Board of Supervisors on Tuesday. Ms. Briskman defeated eight-year Republican incumbent, Suzanne Volpe and this is her first time in elected office.

 

  • Virginia House: Gaining 15 seats in the House in 2017; in 2019, Democrats added another five seats and perhaps a few more as other races are still to be decided. Democrats in Virginia  have not lost momentum in the third year of a Trump presidency. The ultimate size of the new Democratic majorities is still to be decided as a few close races were undecided. Republicans held a 51 to 48 edge going into 2019.

 

  • Virginia Senate: Ms. Ghazala Hashmi will be the first Muslim woman in the Senate, a state which was the former seat of the confederacy. Democrats have picked up at least two seats in the Senate shifting the balance from 20 to 19 favoring Republicans going into the 2019 election. Wondering if people would speak up against the assault on civil liberties, Ms. Ghazala Hashmi anxiety was relieved with her upset victory in a suburban Richmond district.

 

  • Kentucky Governorship:  Andy Beshear appears to have beaten incumbent Matt Bevin by ~5000 votes. Andy Beshear’s message in his victory “It’s a message that says our elections don’t have to be about right versus left, they are still about right versus wrong.” Other races in Kentucky went to Republicans with the Democrats losing the State AG office for the first time in 70 years with the election of an African American, Daniel Cameron.

Update: While a recanvas (less than 1% margin) will follow, the Republican dominated state legislature is poised to establish who is the winner of this election. Kentucky Republicans are going to try and steal election in favor of Bevin.

Stivers said he thought Bevin’s speech declining to concede to Beshear was “appropriate.” He said believes most of the votes that went to Libertarian John Hicks, who received about 2% of the total vote, would have gone to Bevin and made him the clear winner.

A candidate can file a formal election contest with the state legislature, but it must be filed within 30 days of the last action by the state board of elections. The state board is scheduled to certify the results of the race for governor on Nov. 25 this year.

Under this contest, the candidate challenging the results must specify the grounds for the action, such as a violation of campaign finance rules or specific problems when it comes to how ballots were cast.

Such an election contest is covered under Section 90 of the state constitution, which addresses a “contest of election for Governor or Lieutenant Governor.”

Section 90 states: “Contested elections for Governor and Lieutenant Governor shall be determined by both Houses of the General Assembly, according to such regulations as may be established by law.”

Sam Marcosson, a constitutional law professor at the University of Louisville Brandeis School of Law, told The Courier Journal that this language of the state Constitution suggests there must be procedure established by law for a review of a contested election to take place by the House and Senate.

Mr. Marcosson contends the legislature can not just make a procedure up.

“If the House and Senate were just to proceed on vague allegations without proof, that raises serious questions about disenfranchisement of the voters who voted for Attorney General Beshear. It’s an extraordinary proposition to suggest that the General Assembly would take vague allegations of unspecified irregularities and call into question a gubernatorial election.”

 

  • Arizona Tucson:  Democrat, Regina Romero appears to be victorious in the Tucson mayoral race and becomes the first woman and Latina to lead Tucson.

 

  • Mississippi: Republicans won the open Governor’s seat with former Lieutenant Governor Tate Reeves beating former Democrat AG Jim Reeves . In the Senate, Republicans have expanded their control to a super majority which they already had in the House. No surprise here.

 

  • New Jersey: Republicans appear to be to picking up two seats in the Assembly and one in the Senate due to a surge in the southern part of the state where Mr. Trump won easily in 2016.

If you have other election results from Tuesday, feel free to add them. Otherwise, we still have a long way to go to beat Trump and Republicans.

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September JOLTS report: mixed with “hard” positives and a “soft” negative

September JOLTS report: mixed with “hard” positives and a “soft” negative

This morning’s JOLTS report for September was mixed, with a decline in job openings and an increase in layoffs, but advances in hiring and voluntary quits.

To review, because this series is only 20 years old, we only have one full business cycle to compare. During the 2000s expansion:

  • Hires peaked first, from December 2004 through September 2005
  • Quits peaked next, in September 2005
  • Layoffs and Discharges peaked next, from October 2005 through September 2006
  • Openings peaked last, in April 2007

as shown in the below graph(averaged quarterly through Q3):

Here is the monthly data for the past five years:

 

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The ARAMCO IPO Stumbles Out The Door

The ARAMCO IPO Stumbles Out The Door

Finally after numerous delays, the potentially largest Initial Public Offering (IPO) of stock has finally become for fully state-owned ARAMCO in the Kingdom of Saudi Arabia (KSA).  MOst of the delays had involved an unwillingness by the Saudi royal family to publicize financial and other factual details about the company, although issuing an IPO for 5 percent of the company was a part of the Vision 2030 plan of Crown Prince Mohammed bin Salman (MbS).

As it is, for the time being the IPO is only available to Saudi nationals through the Riyadh stock exchange.  It is unclear how long or even if it will open up to foreigners.  Reportedly the Saudis are hoping for it to value  the company at $2 trillion, which would put it well ahead of Apple and Microsoft, both of which are around $1 trillion.  But some observers think this is overly optimistic on the part of the Saudis for a variety of reasons.

Along with that, the US has this past month for the first time since 1978 recorded a trade surplus in petroleum products.  This will continue to put  downward pressure on global oil prices, and also depress the prospects for how much money this IPO will raise in the end.

Barkley Rosser

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Another Look at Drug Pricing, Costs, and Why

Median total costs Table for the most common prescriptions of each of the 49 high-volume brand-name drugs from 2012 through 2017 as detailed in JAMA Network Open’s “Trends in Prices of Popular Brand-Name Prescription Drugs in the United States” 2019.”

A Bit of A Summary: This particular table relates back to a post I wrote; Does Trump Read JAMA Network Open? which reviewed the latest JAMA findings (Trends in Prices of Popular Brand-Name Prescription Drugs in the United States) on pharmaceutical price increases from 2012 to 2017. It is another in a series of articles which have looked at the rising prices of pharmaceuticals. The World Health Organization (2018) findings reflected on R & D costs for cancer drugs and the amount of time needed to recoup those costs (median of 3 years for $750 million) with an average return of $14. 50 for every $1 invested in R & D for cancer drugs.  For the maximum estimated risk-adjusted cost of R&D (US$2.827 BN), the time to cost recovery was 5 years (range: 2 years; 10 years, n=56).

Click on the JAMA Table: Median Total Cost of Top-Selling Brand-Name Drugs 2012 – 2917 to enlarge and again to magnify if needed.

Taken “From the Trends in Prices of Popular Brand-Name Prescription Drugs in the United States” findings, substantial cost increases among these drugs was near universal, with a 76% median cost increase from January 2012 through December 2017, and almost all drugs (48 [98%]) displaying regular annual or biannual price increases. Of the 36 drugs available since 2012, 28 (78%) have seen an increase in insurer and out-of-pocket costs by more than 50%, and 16 (44%) have more than doubled in price. Insulins (ie, Novolog, Humalog, and Lantus) and tumor necrosis factor inhibitors (ie, Humira and Enbrel) demonstrated highly correlated price increases, coinciding with some of the largest increase in drug costs. Relative price changes did not differ between drugs that entered the market in the past 3 to 6 years (2012 – 2017)  and those having been on the market longer (number of drugs, 13 vs 36; median, 29% increase from January 2015 through December 2017; P = .81) nor between drugs with or without a Food and Drug Administration – approved therapeutic equivalent (number of drugs, 17 vs 32; median, 79% vs 73%; P = .21). Changes in prices paid were highly correlated with third-party estimates of changes in drug net prices (ρ = 0.55; P = 3.8 × 10−5), suggesting that the current rebate system, which incentivizes high list prices and greater reliance on rebates, increases overall costs.

The ICER Report (Unsupported Price Increase Report) compared the percentage increases in the  Wholesale Acquisition Cost (WAC – second Column)  to the increase in the Medical Care Consumer Price Index (CPI) over the same period and excluded those drugs with a WAC increase less than 7.32% or two times the increase in Medical Care CPI over the same period. The medical care CPI is one of eight major components of the CPI recorded and reported by the US Bureau of Labor Statistics .

CPI for Medical consists of medical care services (professional services, hospital and related services, and health insurance) and medical care commodities (medical drugs, equipment, and supplies). ICER using overall Medical CPI and not a lone services or commodity related one or subcomponent(s) of either or each was to reflect increases in drug prices relative to inflation in the overall price of medical care. The 77 drugs shown in the ICER Table 2.2 had an increase in Wholesale Acquisition Cost (WAC) greater than 7.32% over  the two-year period (4th quarter 2016 – 4th quarter 2018). The remaining 23 drugs were excluded from further analysis even though they may have been greater than one times CPI.

The ICER Table 2.3 depicting 9 drugs of the 77 shows  the percentage change in net price (Column 3) over the two-year period from the fourth quarter of 2016 to the fourth quarter of 2018, and the and the increase in drug spending during calendar years 2017 and 2018 and the 4th column depicts net revenue after discounts, rebates, concessions to wholesalers and distributors, and patient assistance programs same as Table 2.2 in the report. Only the ICER Table 2.3 is shown here (JAMA chart above).

The first seven drugs under assessment did not display evidence meeting the criteria accepted evidence grading system called GRADE. As a result, the seven are reported as having price increases “unsupported by new clinical evidence.” GRADE is a method used by systematic reviewers and guideline developers to assess the quality of evidence and decide whether to recommend and intervention.  GRADE differs from other appraisal tools for three reasons: (i) because it separates quality of evidence and strength of recommendation, (ii) the quality of evidence assessed for each outcome, and (iii) observational studies can be ‘upgraded’ if they meet certain criteria.

So What Does All of This Mean?

Other reports recognize similar. Healthcare costs are increasing at a much higher rate than inflation, enough so, JAMA is reporting patented pharmaceutical price increases to be 50% to 100% between 2007 and 2014, as are the generic versions, and those introduced during 2007 and 2014 have seen similar sizeable increase. The exhibited JAMA report details the increases.

The ICER report goes a bit further and establishes a benchmark of increase at twice Medical CPI and whether a price increase greater than the benchmark can be justified by the result of significant value brought to the market to account for the increase. At greater than a generous twice Medical CPI, the top nine drugs exceeded this benchmark and after investigation,  did not bring significant value to the market place following the 4 significant values claimed by pharmaceutical companies. This analysis was completed on  9 of 77 drugs having price increases greater than twice Medical CPI. Seven of the nine drugs were shown to have price increases for which additional value could not be substantiated. The remaining two had evidence of clinical value which could not be examined at this time. Then there is the balance of the 77 drugs which have had price increases greater also. Legit or not?

Remember, the ICER is the organization which justifies pricing for many of the new drugs coming to the market place.

The World Health Organization Report reviews the costs of R & D for Cancer Drugs which pharmaceutical companies blame as a the major factor for higher prices over the life of their patents. The WHO document reports the R & D costs are recouped in a median 3 to 5 years for R & D investments of $750 million to $2.8 Bn. Drug patents are significantly long than the recovery. Rent taking . . .

This is just pharma alone and I did not look at hospitals, clinics or hospital supplies. Briefly, “Health Affairs – Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007–14″ reports  inpatient care at hospital prices grew 42 percent, while physician prices grew 18 percent. Similarly, for hospital-based outpatient care, hospital prices grew 25 percent while physician prices grew 6 percent. Both this report and Kocher and Berwick’s “While Considering Medicare For All: Policies For Making Health Care In The United States Better: Health Affairs” point to increases in hospital care as the leading cause of increased healthcare insurance premiums.

The emphasis by politicians has been on the pricing of drugs without looking at the supply chain and the PBM’s influence on it; without looking at the costs of R & D, the return from sales revenue and how quickly those costs are recovered; and without looking at the exclusivity granted drugs through patents that allow the ability to increase pricing without a returning benefit clinically, socially, to the system, and most of all to the patient. The emphasis by government should be a review of drug costs to establish a fair market value/price. I do not see a foundation being established for the setting of pricing.

 

Trends in Prices of Popular Brand-Name Prescription Drugs in the United States, JAMA Network Open, Nathan E. Wineinger; Yunyue Zhang; Eric J. Topol, May 2019

Unsupported Price Increase Report, Institute for Clinical and Economic Review; David M. Rind, Foluso Agboola, Varun M. Kumar, Eric Borrelli, Steven D. Pearson; October 2019

Technical Report, Pricing of cancer medicines and its impacts; World Health Organization; 2019

While Considering Medicare For All: Policies For Making Health Care In The United States Better; Health Affairs; Kocher and Berwick; 2019

Health Affairs – Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007–14;” Health Affairs; Zack Cooper, Stuart Craig, Martin Gaynor, Nir J. Harish, Harlan M. Krumholz, and John Van Reenen; 2019

 

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Has Tyler Cowen or John Cochrane Ever Heard of Monopsony Power?

Has Tyler Cowen or John Cochrane Ever Heard of Monopsony Power?

I’m going to replicate one portion of a long winded rant about alleged cognitive dissonance:

The argument for a minimum wage is that labor demand is inelastic — employers will hire the same number of workers. They will just absorb the higher wages or pass along the costs to customers. Workers get all the benefit. If labor demand is elastic, employers cut back on the number of employees.

Of course, labor economists would recognize that John Cochrane’s entire post assumes a perfectly competitive labor market. One has to wonder about economists who have never even considered monopsony power.

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Innovative bureaucrats?

by David Zetland    (Via One handed economist)

Innovative bureaucrats?

The Dutch are fond of subsidies for arts, sustainability and… innovation.

These subsidies arise when bureaucrats with “topical portfolios” award cash to winners of various “promise to stimulate [topic]” contests.

On the one hand, I am pleased to see the government providing public goods, i.e., stimulating efforts to help everyone.

On the other hand, these programs tend to find the least-productive incentives to advance the “topic”

(My one-handed view is that this structure is wrong… keep reading…)

So the irony is that the bureaucracy in charge of innovation…

  • …has permanent employment contracts and long vacations;
  • …gains nothing from success but loses nothing from failure;
  • …works in non-market areas where the lack of objective measures of performance leads to subjective choices of winners and losers; and
  • …happily spews a meaningless whirlpool of jargon borrowed from strategic plans, conference videos, and social media #buzzwords.

If I was in charge of these topics, I would follow the new development model of “pay for results” by specifying the criteria for success and then rewarding the most successful efforts to reach those goals with cash and publicity.

This system would have nothing to say about who did the work, what angle they took, or how fancy their method. It would pay for results.

My one-handed conclusion is that governments should stop chasing “creative,” “innovative,” “smart,” or “sustainable” and just reward results.

What’s your experience on this topic?

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Buried Lede … all time record

They got the goods, but some editor made them semi bury them.

By Mark Mazzetti, Eric Lipton* and Andrew E. Kramer note that the first shipment of Javelin missiles to Ukraine was mysteriously held up by the OMB until April 2018 when then prosecutor general Yurii Lutsenko froze the investigation of Paul Manafort. This isn’t a scoop. Both events were reported at the time.

To me the odd thing is that the key evidence is reported in the second to last sentence of the article. The two references to April 2018 are separated by Ten (10) paragraphs. In any case, the facts are devastating for Trump

Near the end of 2017, just as the government in Kiev was trying to get final approval from the Trump administration on the sale of the Javelin anti-tank weapons, Mr. Poroshenko’s prosecutor general, Yuriy Lutsenko, had begun freezing cases in Ukraine relevant to the Mueller investigation, including an inquiry tracing millions of dollars that Ukrainian political figures paid to Mr. Manafort.

The other two involved the law firm Skadden, Arps, Slate, Meagher & Flom, which wrote a report with Mr. Manafort’s help that came to be seen as whitewashing the arrest and imprisonment of a Ukrainian politician.

[skip]
No evidence has surfaced of an earlier quid pro quo of making the Javelin missile sale contingent on the halting of investigations relevant to the Mueller inquiry.

Except for the timing which makes it very clear what happened (it was clear at the time, but no one was interested)

Mr. Lutsenko took further steps to slow walk the Ukrainian cases related to the Mueller investigation in November and gave an official order to freeze them in April 2018.

One examined possible money laundering in a $750,000 payment to Mr. Manafort from a Ukrainian shell company. Another scrutinized a Ukrainian politician who signed entries designated for Mr. Manafort in a secret ledger of political payoffs uncovered after the 2014 revolution in Ukraine.

The other two involved the law firm Skadden, Arps, Slate, Meagher & Flom, which wrote a report with Mr. Manafort’s help that came to be seen as whitewashing the arrest and imprisonment of a Ukrainian politician.

[skip]

the White House Office of Management and Budget briefly held up the weapons sale after the Pentagon and the State Department had both approved it. The reason for the holdup, first reported by The Daily Beast, is unclear.

The logjam eventually broke, and in April 2018 the first of 210 Javelins and 35 launching units were shipped to Ukraine.

The second “April 2018” is in the second to last sentence in the article.

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October jobs report paints a portrait of a full (or nearly full) employment economy

October jobs report paints a portrait of a full (or nearly full) employment economy

HEADLINES:
  • +128,000 jobs added (+148,000 ex-Census)
  • U3 unemployment rate up +0.1% from 3.5% to 3.6%
  • U6 underemployment rate up +0.1% from 6.9% to 7.0%

Leading employment indicators of a slowdown or recession

I am highlighting these because many leading indicators overall strongly suggest that an employment slowdown is coming. The following more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mixed:

  • the average manufacturing workweek fell -0.2 from 40.5 hours to 40.3 hours. This is one of the 10 components of the LEI and is negative.
  • Manufacturing jobs declined by -36,000 (but would have risen by +6,000 were it not for the GM strike). YoY manufacturing is up 49,000, a sharp deceleration from 2018’s pace.
  • construction jobs rose by +10,000. YoY construction jobs are up +148,000, also a deceleration from summer 2018. Residential construction jobs, which are even more leading, rose by +2,900.
  • temporary jobs declined by -8,100. September’s strong number, however, was revised even higher to +20,100.
  • the number of people unemployed for 5 weeks or less rose by -100,000 from 1,868,000 to 1.968,000.

Wages and participation rates

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